UKRAINE WTO UPDATE: JANUARY 26

UNCLAS KYIV 000200

SIPDIS

SENSITIVE
SIPDIS

GENEVA FOR USTR
STATE PLEASE PASS TO USTR FOR KLEIN/MOLNAR
USDOC FOR 4201/DOC/ITA/MAC/BISNIS
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA

E.O. 12958: N/A
TAGS: ETRD WTRO ECON PGOV UP
SUBJECT: UKRAINE WTO UPDATE: JANUARY 26

REF: A. KYIV 82

B. 2006 KYIV 4667

C. 2006 KYIV 4648


1. (SBU) Summary: The GOU is anxious to push ahead as
quickly as possible on its WTO accession. Minister of
Economy Volodymyr Makukha is requesting to hold bilateral
consultations in early, rather than late, February.
Makukha continues to work to ensure U.S. beef and pork
imports flow freely, although he also hopes to begin
discussions soon with the USG on conducting an audit of the
U.S. veterinary system. We have cautioned the GOU on plans
to reconstitute Special Economic Zones; the Ministry of
Economy assured that any new zones would be compliant with
WTO rules. Pharmaceutical companies approve of the draft
resolution on registration of medical drugs, one of five
the GOU has identified as required for accession. WTO DG
Pascal Lamy rejected the idea that Ukraine and Russia might
synchronize their accessions, and he plans to meet with PM
Viktor Yanukovych at Davos. End Summary.


2. (U) This latest edition in a series of regular update
cables regarding the status of Ukraine's WTO accession
(refs A, C, and previous) covers the period January 13 -
January 26.

GOU Anxious to Push Ahead Quickly
--------------


3. (U) Minister of Economy Volodymyr Makukha told
Ambassador on January 23 that the GOU wants to move ahead
on accession plans as quickly as possible. Makukha
expressed concern regarding Washington's proposal to
conduct the next round of bilateral talks on February 23
and asked if this date could be moved up. If the bilat
could be held during the first half of February, said
Makukha, this would pave the way for a Working Party
meeting in late February, and hopefully for a final WTO
General Council vote in July. Ambassador promised to pass
on this request to Washington. Vyacheslav Tsymbal,
Director of the Ministry of Economy's WTO Division, told
EconOff January 25 that Ukraine had already received
comments from the EU on Ukraine's recently passed
legislation and were anxiously awaiting U.S. comments.

Agriculture Trade
--------------


4. (SBU) Makukha reiterated to Ambassador his argument (ref
B) that the GOU had gone "above the law" to let in imports
before conducting an audit of the U.S. veterinary
inspection system. Makukha sent a letter on January 22 to
Ambassador Crowder, USTR Chief Agricultural Negotiator,
stating unambiguously that the Ukrainian market was now
open to U.S. beef and pork, and requesting consultations
with U.S. experts on conducting a system audit. Zhanna
Pastovenska, from the Ministry of Economy's WTO Division,
noted to Econoff January 17 that even just setting a date
to begin discussions of a system audit (i.e. not a date for
the audit itself) would help give the Ministry of Economy
leverage in dealing with other parts of the GOU who are
emphasizing this issue. He suggested to Ambassador that
the GOU was considering ending all grain export quotas in
February.

Special Economic Zones (SEZs)
--------------


5. (U) Econoff queried Tsymbal on January 18 regarding
plans to reconstitute SEZs and cautioned that the GOU would
need to be careful to avoid any violations of WTO rules.
Tsymbal said he expected the government to push through a

SIPDIS
law on SEZs during the first quarter of 2007. The GOU was
well aware of the WTO implications, said Tsymbal, and would
ensure full WTO compliance.

Data Exclusivity: Pharmaceutical Companies Happy
-------------- ---


6. (SBU) Katerina Rybalchenko, Executive Director of the
Association of Pharmaceutical Research and Development
(APRaD),which unites local affiliates of major
international pharmaceutical companies, told Econoff on
January 19 that APRaD approved of the draft Cabinet of
Ministers Resolution on registration of medical drugs.
APRad still had one small concern on specific language, but
overall thought the draft was in good shape. Rybalchenko
said she expects the Cabinet to approve the resolution, one
of five outstanding regulatory acts on the GOU's list of
those required for accession, with no changes.

Lamy: No Synchronization with Russia
--------------


7. (U) WTO Director-General Pascal Lamy, speaking to
reporters on January 23, rejected the possibility that
Ukraine and Russia would somehow synchronize their
accessions, noting that neither Ukrainian nor Russian
officials had ever raised the issue of synchronization with
him. Lamy said he planned to discuss Ukraine's accession
at a January 26 meeting with PM Viktor Yanukovych during
the World Economic Forum in Davos.

TAYLOR